Overview of Finance About Supply Chain

Mission: To become the largest consumer electronic

External environment analysis

Countries that they are in: China, Canada, Europe, USA

Political/Legal:

Opportunities:

• Political stability.
• Government support technology and innovation in businesses

Threats:

Pg4. Sales tax.

• Change in regulation/tax level (e.g increase in corporate tax, sales, tax, import/export tax)
• Legislation forcing them to have brick and motar store so that can tax them
• Government would rather support local brands.

Economic:

Opportunities:

• Increase in country’s wealth

Threats:

• Economic downturn/Recession
• Overheating (Too many people in the business)

When a prolonged period of good economic growth and activity causes high levels of inflation (from increased consumer wealth) and inefficient supply allocations as producers overproduce and create excess production capacity in an attempt to capitalize on the high levels of wealth. Unfortunately, these inefficiencies and inflation will eventually hinder the economy's growth and cause a recession. 

Social:

Opportunities:

• Change in preference (lifestyle)

Threats:

• Increase in online shopping (bricks and mortar obsolete)

Technological:

Opportunities:

• Change in technology = increase in products= more returning customers
• Technological advancement will help to improve the business process= cost savings. Streamline value chain
• Enhance customer experience

Threats:

• Integration of functions (e.g Camera, Word doc..= do not need various products)
• Change in technology/destructive technology (way they sell) Make previous technology obsolete  
• Too rapid change in technology

Porter’s 5 forces (Forces Driving Industry Competition)

Bargaining power of suppliers (high)

• Lack of availability of substitute products. (5 main suppliers which makes up 40%) (high dependency)
• Suppliers not dependent on industry firms because they can sell themselves (low)
• High threat of suppliers integrating forward  e.g Apple

Bargaining power of buyers  (Moderate/High)

• Low switching cost (Can switch to other players. E.g Amazon)
• Buyer group price sensitive (high)
• Buyer group not concentrated= more on retail= unable to force prices down
• Low threat of buyer integrating backward

Threat of new entrants (LOW)

• High barrier to entry (Capital requirements)
• High expected retaliation from Incumbents (e.g Price war)

Threat of substitute products (LOW)

Intensity of Rivalry (High)

• High number of competitiors
• High fixed cost
• Products not differentiated

Overall: Unattractive Industry

Competitor Analysis:

Strategy (outpacing)

Resources

Organizational Capabilities: Understand the needs of customers

Support activities

HR management

Add Value: Training (extensive knowledge, improve service to customers)